The Arena Issue

A little more than one month after the completion of the greatest season in Columbus Blue Jacket history, the team announced that it had lost over $80 million since the 02-03 season. The apparent cause of the losses is the deal that the Blue Jackets Organization has with Nationwide and the arena.

Since the arena is owned privately by Nationwide, rather than a piece of public property, the Jackets have more costs to account for and do not receive some of the same revenue flow as do other teams. As part of the deal to let the team use the arena, Nationwide kept the naming rights without paying for them, receives all parking revenue, and retained a few suits.

Also, the Jackets are required to pay the following to Nationwide: rent, fee for practice facility, fees to maintain facilities, a ticket surcharge to Columbus Schools, as well as a few other secondary fees. These are all extra costs that most teams are not required to pay, and for the Jackets, have led to great losses.

The team, as well as Nationwide, has done a few things to address the problem and some solutions have been proposed. The team has asked the county to consider purchasing the building and suggested that a sin tax be instituted to cover the costs of the arena.

Nationwide has offered to sell the building and relinquish naming rights at significant loss. “We need to do whatever we can to keep this franchise in our city,” said Natiowide CEO Dimon McFerson. “Think of all the jobs that have been created. Think of the economic development. Think of how the face of Downtown has been changed.”

If the sin tax were implemented, Franklin County consumers would pay an extra 2.3 cents per beer, 4.5 cents per pack of cigarettes, 6.5 cents on each bottle of wine, and 60 cents on 5th of liquor. Beer and cigarette companies immediately began to lobby hard against the deal, and not enough support was seen from county commissioners. Therefore, as of last week, the proposal was seemingly dead.

As of now, it appears that if the team is going to fix this problem, it is going to need the support of the public, and the county. It does not appear they can continue the private deal they currently have with Nationwide.

From 1998 to 2008, John Glenn Affairs did an economic study of the Arena District that showed just how important the district is to Columbus and its economy. According to the study, there were 172 businesses, 7000 employees, 6 housing complexes, and 800 residents in the district as of 2006. The study also recorded $850 million in visitor spending over that span of ten years.

According to the Columbus Dispatch, NHL Commissioner Gary Bettman has addressed the problem by saying “As long as (the lease) can be fixed — and I think it can get fixed — people should not be concerned,” he said. “I was there during the playoffs. I’ve seen the growth of the Arena District. Nationwide Arena and this club have become an integral and essential part of this community.”

“If we would somehow lose the Blue Jackets, we’d be a lesser city” said former Columbus Mayor Greg Lashutka. The former mayor is not the only one concerned about the situation, County Commissioner John O’Grady had this to say about the problem, “I don’t want to be a county commissioner when that thing closes.”

The team has stated it has not been contacted by Canadian Billionaire Jim Balsillie. Balsillie has attempted to purchase the Penguins, Predators, and Coyotes all within the past three years with plans on moving a team to Southern Ontario. According to Puck-rakers, an attorney that represents Balsillie has stated that he has never had any interest in purchasing the Jackets. “They’re not portable. They’re not moving. The market’s too good.” Said the attorney.

You don’t have to be a hockey fan to see the impact the team has had on this city. “For a place obsesses with college football, Columbus owes much of its revival to pro hockey” wrote Jason Cowen in his May 2008 article, Columbus, Ohio’s happening side. “When Nationwide Arena opened in 2000 people not only came to see the Blue Jackets but they began to spend more and more time and money in the once gritty Short North Area” continued Cowen.

The teams needs public support to resolve this issue, and is urging the public to contact their commissioners about the dilemma asking them to take action and make sure the problem get resolved.

If you would like to contact a Franklin County Commissioner regarding the issue, their contacts are listed below.

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3 Comments

While I don’t want to lose the Blue Jackets, the county (and city) shouldn’t buy the stadium. I don’t doubt that the Blue Jackets bring some to the city, but of the $85 million per year ($850/10), I have to imagine a lot of it came from declining areas of the city (City Center for instance) that would have faired better without the added competition.

That’s really beside the point though. If the Blue Jackets don’t bring in enough on their own (even with monetary/tax concessions from Nationwide and the city) then it seems the money could better be spent somewhere else. I don’t want to lose the Blue Jackets. It would be a hit to the city, but it was this whole merging of private companies and public money that is responsible for so much of the mess we are now entering (and I’m convinced that things will get far worse before they gets better). Better to lose the Blue Jackets than create another debt obligation we can’t pay. The end result is a city more able to sustain a hockey team long term anyway.

Doug

June 15, 2009 at 8:12 pm

Eric….City Center failed for reasons that had nothing to do with the competition in the Arena District…If we lose the Blue Jackets do you really believe that someone would bring a team back to Columbus? If the money could be better spent somewhere else then please tell us what that is? If you lose the Blue Jackets you lose the Arena District. Without the Arena district thousands will be back to being unemployed. You are really out of touch with the situation it seems.

Paul

June 18, 2009 at 11:12 pm

So, poor planning, a lack of parking and having groups (possibly gangs) of youths clogging City Center causing it to fail is related to the Jackets, Nationwide Arena and the Arena District?